Polyhedra Network’s ZKJ token crashed nearly 60% within an hour of June 15th, wiping out its market capitalization of over $360 million.
Koge, the governance token of 48 Club DAO, also fell 50% during the same window, losing its market capitalization of over $100 million.
ZKJ faces major liquidity unmanagement
The sharp sale began when Koge/USDT liquidity pools were exhausted and liquidity providers were unable to leave. Panic sales continued as investors began converting Koge to ZKJ.
According to an early community report, the Koge team was unable to add USDT to the liquidity pool. This has led to what some users called “rugs from both sides.”
With no USDT remaining in the Koge pool, the holder rushed to offload Koge to the ZKJ pool.
However, the rapid influx overwhelmed the ZKJ/USDT pair, causing a domino effect that hinders ZKJ’s price and investor confidence.
Members of 48 Club Dao, the group behind Koge, expressed their anger over the incident and denounced the team for negligence and mismanagement.
Social media was flooded with posts demanding accountability from both projects. The phrase “sturdy from both sides” was trended within the crypto circle.
The incident has seriously damaged trust in both ecosystems, and users have questioned the sustainability of their liquidity strategies.
Beyond liquidity concerns, the market structure has put further pressure on its market structure. Later this week, the 5.3% ZKJ token worth $32 million will be unlocked.
When Binance Alpha Volume collapsed, analysts warned that bots and whales would control the order book, exacerbating the volatility of both tokens.
ZKJ and Koge: Tight-Linked Ecosystem
The crash highlights the intertwined nature of ZKJ and Koge. Both tokens are frequently paired in liquidity pools and used in agricultural strategies.
ZKJ supplies Zkbridge and ZKP infrastructure, while Koge operates as a governance token for 48 clubs. This is a group focused on the BNB chain Defi.
Recent coordinated agriculture and arbitrage movement activities made volumes bloated between the two, making them vulnerable to liquidity shocks.
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